APSCo welcomes new measures to support prompt payment code

Following the announcement of new measures to support the Prompt Payment Code, (PPC) Samantha Hurley, operations director at APSCo, said:

“We are very encouraged by the news that Margot James, Minister for Small Business and Philip King, Chief Executive of the Chartered Institute of Credit Management (CICM) have announced new changes to the code to ensure that the Government leads by example and consequently encourages other businesses to follow. The need for more action on late payment regulation was one of the main areas that we focused on in our manifesto and so we are pleased that it continues to be a priority for Government. In fact, through our engagement with the CICM we have encouraged including the APSCode, a code of conduct for RPO and MSP members which addresses payment culture issues such as ‘pay when paid’ clauses, as a sectoral derivative of the PPC.

“For APSCo SME members, it’s still a major challenge gaining access to affordable finance where master vendors include “pay when paid” clauses in contracts. A ‘backstop’ or ‘direct access’ clause needs to be introduced to provide greater security within the supply chain and assurance that payment will be forthcoming. Consequently, we hope that the Government and the CICM will continue to consider sectoral based codes, such as the APSCode, which requires signatories to consider the use of a backstop. To date, 80% of APSCo RPO/MSP members have signed up to the code.

“We also welcome the fact that legislation is now in place to cascade 30 day terms down the supply chain for all public sector work and the fact that businesses can make use of a ‘Mystery Shopper’ service for public sector contracts so that suppliers can report poor procurement practice and late payment through the supply chain.

“The statutory duty for large businesses to report on payment practices will come into force in April next year and we hope that the signatories to the PPC will help drive a culture of better payment practice by leading by example and paying within the suggested 30 days rather than the requirement of 60 days.

“We also welcome the announcement that a Small Business Commissioner will be appointed by Government to provide help and advice to SMEs including on late payment.

“Late payment of invoices is an abuse of trade credit and can cause real problems particularly for our SME members. We hope that these steps will help create the fair and transparent payment culture that our members deserve.”